2017 (9) TMI 141 - AT - Central Excise

CENVAT credit - Input Service - GTA Service (Inward and Outward freight) - CIPET Inspection Charges - Held that - the admissibility of CENVAT Credit on GTA Service (outward freight) rests on the condition of sale - the present case is remanded to the Adjudicating authority for scrutiny of the necessary sales contract agreement, to ascertain the conditions of sale - matter on remand. CIPET Inspection Charges - Held that - the case is covered by the decision in the case of Hon ble Gujarat High Court in Cadila Healthcare Ltd case 2013 (1) TMI 304 - GUJARAT HIGH COURT , where it was held that services rendered by a technical inspection and certification agency fall under sub-clause (zzi) of clause (105) of section 65 of the Finance Act which is one of the clauses specified under sub-rule (5) of rule 6 of the Rules - credit allowed. Appeal allowed and part matter on remand.

Summary

Issues involved: Appeal against denial of CENVAT Credit on 'Input Service' including GTA Service and CIPET Inspection Charges.

Analysis:

1. Background and Facts: The appeal was filed against an order passed by the Commissioner of Central Excise (Appeals) regarding the denial of CENVAT Credit on certain services availed by the appellant, leading to a demand for recovery of credit amount with interest and penalty.

2. Arguments on GTA Service (Outward Freight): The appellant, engaged in manufacturing HDPE Pipes, availed CENVAT Credit on outward freight and other charges. The advocate argued that the outward freight for delivery of goods to customers' premises qualifies as an 'Input Service' eligible for credit, citing a relevant Tribunal order. The advocate requested a remand to ascertain the conditions of sale for further scrutiny.

3. Arguments on CIPET Inspection Charges: Regarding the denial of credit on CIPET inspection charges, the advocate contended that these charges fall within the scope of 'Input Service' as the pipes supplied required third-party inspection, supported by a previous judgment.

4. Revenue's Stand: The Revenue supported the findings of the Commissioner (Appeals) without introducing new arguments.

5. Tribunal's Decision on GTA Service: The Tribunal analyzed the admissibility of CENVAT Credit on GTA Service (outward freight) based on the condition of sale, emphasizing consistent Board approaches and relevant legal precedents. It concluded that the credit on outward freight is admissible when the manufacturer is burdened with delivering goods to the buyer's premises.

6. Decision on Inspection Charges: Referring to a judgment of the Gujarat High Court, the Tribunal held that the appellant is eligible for credit on the service tax paid for inspection charges.

7. Final Decision and Remand: The Tribunal remanded the appeal to the adjudicating authority solely to determine the eligibility of credit on GTA service (outward freight) in light of its observations, disposing of the appeal accordingly.

This detailed analysis highlights the key arguments, legal interpretations, and the Tribunal's decision on the issues of CENVAT Credit eligibility, specifically on GTA Service and CIPET Inspection Charges, as addressed in the appellate judgment.